Activist hedge fund Laxey Partners has demanded changes at investment company Alliance Trust to boost its share price, the latest example of rebel shareholders putting pressure on a fund management company.
On Monday, Laxey published details of a letter which it had sent to Alliance Trust on 27 January.
In the letter, Laxey said Alliance Trust should set up a "discount control mechanism" (DCM) for its share price and that it should also change its "shareholder enfranchisement facility" (SEF) savings scheme.
Laxey said a discount control mechanism would mean that Alliance Trust's shares would more accurately reflect the value of its assets, while the current SEF scheme gave an unfair advantage to Alliance's directors over other shareholders.
"We believe the stock market views both the lack of a DCM and the SEF as a "poison pill" which is depressing the price of your shares," Laxey said in its letter, adding that it would call for a shareholder meeting to put forward these proposals.
Laxey's move comes a week after activist investor Edward Bramson ousted the chairman of F&C Asset Management, and pledged a shake-up of the British funds firm.
City A.M. Reporter